State to rethink purchase of railway

  • 2006-08-30
  • Staff and wire reports
TALLINN - The government said it would decide in the near future whether to have another shot at purchasing a majority stake in Eesti Raudtee (Estonian Railway).

According to the Postimees daily, Economic Affairs Ministry adviser Heido Vitsur said the government intended to strike a deal with Baltic Rail Services, a private firm that owns a majority stake in the railway, on terms as soon as possible.
Vitsur said the government had not yet decided what price it was prepared to pay for the 66 percent of shares in the railway, but it couldn't be very much higher than the government's earlier offer 's 2.2 billion kroons (140 million euros) 's made last year.
"The price is a matter of talks, and it may have risen a little in the meantime, but there cannot be any drastic change," Vitsur said.

Juri Kao, a BRS board member and member of Estonian Railways' supervisory council, said the government had not made any concrete proposals. "It's such an old story that it's difficult to say anything about," Kao said. Earlier BRS wanted 2.6 billion kroons for their stake.

Prime Minister Andrus Ansip said that BRS should offer a binding quote of the price it wants to get. An offer by the owner of the majority shares has so far been vague, he added, giving one the impression that there was no wish to sell.
Meanwhile, the Finance and Economy Ministry rejected a business plan put forward by BRS, claiming it would create a situation where the railway infrastructure would continue to be underfinanced and therefore endanger the sustainability of the railway's infrastructure, the Ministry of Finance said.